John Harrington on The State of the Newsstands: Bloom in the midst of the doom and gloom

February 23, 2010

If anyone can put a positive and thoughtful spin on the “State of the Newsstand” in the United States after the “2009 worst year ever,” that person would be John Harrington, the founder and editor of The New Single Copy, and the man who knows more about the newsstand business than anyone I know. He has a wealth and depth of information that helps simplify the complex state of the newsstand (hopefully).

Armed with a lot of numbers, Mr. Harrington was my guest speaker at the Magazine Innovation Center at the University of Mississippi’s School of Journalism. He revealed to the students that “last year was the worst year ever in the history of the newsstands, yet we distributed more than 9,000 titles on the nation’s stands.” Yes, folks, you read that right. There were over 9,000 different titles (ranging from a one time appearance to a weekly presence) on the nation’s stands. However, Mr. Harrington revealed that his preliminary findings of the key industry performance figures for 2009 were not as encouraging as the number of titles available at the marketplace. The dollar sales for all magazines (audited and not-audited) was $4.44 billion, down 8.1% from 2008 and the total unit sales was 1.11 billion down 12.9% from 2008. The sales efficiency for 2009 was 36.0% up a little from 2008’s 35.2%.

Mr. Harrington also revealed that his research shows that based on available data from 316 magazines in 2001, the average subscription price for a magazine back then was $1.22, and the average single copy price was $2.83 for a ratio of 43% of the subscription price. In 2008, his research on 437 magazines shows that the average subscription price was $1.12 (down 8.2% from 2001), and average single copy prices were $3.76 (up 32.9% from 2001) for a ratio of 30% of the subscription price. His conclusion: we are still using the subscription copies as “a give away” to meet the rate base. That means we are still focusing on the advertising driven model as the major source of revenue. He went one step further and used as an illustration the revenues of the number one selling magazine on the nation’s newsstands Cosmopolitan. The latest available figures show that Cosmo (although it is the number one newsstand seller) generates 76% of its revenues from advertising, 20% from the newsstands and 4% from subscriptions. Keep in mind that Cosmo sells almost double the number of copies on the newsstands compared to subscriptions.

According to Mr. Harrington, Cosmo is not alone. In 2001 the revenue sources for the major 153 magazines were divided as follows: Advertising 70.9%, Subscriptions 18.9%, Newsstand 10.2%. In 2008 the revenue sources for the major 196 magazines were as follows: Advertising 79.2%, Subscription 11.9%, Newsstand 8.9%.

A lot of the current problems in the American publishing model are related to the economy of revenues that model has depended on for years. When the economy tanked in 2008, the business model followed. Mr. Harrington’s offered three “hopeful” predictions and one “better be”:

1. The newsstand will return to being friendly (hopefully)
2. Subscriptions marketing will be more rational (hopefully)
3. The publishing financial model will be more balanced (hopefully)
4. The world will be a better place (it better be)

And to cap it all, he reminded the students that “the newsstand IS the place where success in our business can truly be measured.” Why, you may ask? “Because folks have to pay the cover price to get the magazine, there is no other way around it.”